Section 128A and Rule explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The waiver itself is simple: pay the tax for July 2017 to March 2020 and the interest and penalty go. The procedure is where cases are lost — eight forms, several deadlines, and an irreversible choice about a pending appeal.
Section 128A(1), inserted by the Finance (No. 2) Act, 2024, notified through Notification No. 17/2024-CT dated 27.09.2024, w.e.f. 01.11.2024: where tax is payable under (a) a s.73(1) notice or s.73(3) statement with no s.73(9) order yet, (b) a s.73(9) order with no order under s.107(11) or s.108(1), or (c) an order under s.107(11) or s.108(1) with no order under s.113(1) — pertaining to 1 July 2017 to 31 March 2020, or part — and the person pays the full amount of tax by the notified date, no interest under s.50 and no penalty shall be payable and all proceedings are deemed concluded. Rule 164 carries the procedure: applications in SPL-01 or SPL-02, notice in SPL-03, reply in SPL-04, acceptance in SPL-05 or SPL-06, rejection in SPL-07, undertaking in SPL-08.
Which stage you are at decides the form
| Your position | s.128A(1) clause | Application form |
|---|---|---|
| A s.73(1) notice or s.73(3) statement, with no s.73(9) order yet | (a) | SPL-01 |
| A s.73(9) order, with no appellate order under s.107(11) or revision under s.108(1) | (b) | SPL-02 |
| An order under s.107(11) or s.108(1), with no Tribunal order under s.113(1) | (c) | SPL-02 |
The three provisos to sub-section (1)
First proviso — section 74 cases can qualify. Where a notice was issued under s.74(1) and an order is passed, or required to be passed, in pursuance of the direction of the Appellate Authority, Tribunal or a court under s.75(2) — that is, where the fraud allegation failed and the matter was re-determined as if under s.73 — that notice or order is treated as one under clause (a) or (b).
So a taxpayer who successfully resists a suppression allegation is brought within the waiver. Section 75(2) and the suppression allegation →
Second proviso — departmental appeals. Where the department has applied under s.107(3) or s.112(3), or appealed under s.117(1) or s.118(1), or revision proceedings under s.108(1) are on foot, conclusion is subject to the person paying the additional tax, if any, per the resulting order within three months of it.
Third proviso — no refund. Where interest and penalty have already been paid, no refund is available.
That last one matters commercially: a taxpayer who paid interest and penalty before the scheme cannot recover them by applying now. The benefit runs only to amounts not yet paid.
Two things the scheme does not cover
Erroneous refunds — s.128A(2). Nothing in sub-section (1) applies to any amount payable on account of erroneous refund. Erroneous refund recovery →
Pending appeals not withdrawn — s.128A(3). Nothing applies where an appeal or writ petition filed by the person is pending before the Appellate Authority, Tribunal or a court and has not been withdrawn on or before the notified date.
The second is the irreversible decision. Withdrawal is the price of admission, and it is why the restoration machinery in Rule 164(15) exists.
Rule 164: the procedure and its deadlines
Application. In SPL-01 for a clause (a) case, SPL-02 for a clause (b) or (c) case, filed electronically.
Where an appeal must be withdrawn, and the withdrawal order has not yet issued, the proviso to Rule 164(7) accommodates it — and the Explanation to Rule 164(13) excludes the period from the filing of the application until submission of the withdrawal order when computing the officer's time limit.
Notice. If the officer is not satisfied the application is admissible, he issues a notice in SPL-03.
Reply. The applicant replies in SPL-04.
Order accepting. In SPL-05, concluding the proceedings under s.128A.
Order rejecting. In SPL-07, where the officer is not satisfied with the reply.
Rule 164(13) — the officer's time limit:
- where no SPL-03 was issued: three months from receipt of the SPL-01 or SPL-02;
- where SPL-03 was issued: three months from receipt of the SPL-04 reply, or four months from issuance of the SPL-03 where no reply is received.
Rule 164(14) — deemed approval. If no order is issued within those limits, the application shall be deemed to be approved and the proceedings deemed concluded.
That is a genuine protection, and it makes the date of filing and the date of any SPL-03 or SPL-04 worth diarising precisely.
What happens after acceptance — Rule 164(11)
For an SPL-01 case (a notice or statement under s.73): the DRC-07 summary of order under Rule 142(5) shall not be required to be issued in respect of that notice or statement. The demand simply does not proceed to an order.
For an SPL-02 case (an order): the liability created in Part II of the Electronic Liability Register shall be modified accordingly. So the entry is adjusted rather than the order being set aside.
Check the register after an SPL-05 issues. An unmodified liability entry is what later produces a recovery notice on a concluded matter.
If the application is rejected — Rule 164(15)
(a) No appeal filed against the SPL-07 within the s.107(1) period: the original appeal, withdrawn in order to file the SPL-02, shall be restored.
(b) An appeal is filed against the SPL-07, and:
- (i) the appellate authority holds the rejection was wrong: it passes an order in SPL-06 on the common portal accepting the application and concluding the proceedings under s.128A;
- (ii) the appellate authority holds the rejection was right: the original appeal is restored, subject to the applicant filing an undertaking in SPL-08, electronically, within three months of the APL-04 order, that he has neither filed nor intends to file any appeal against that order of the Appellate Authority.
So withdrawal is not a one-way door — but the route back requires specific steps within specific periods, and the SPL-08 undertaking within three months is the one most easily missed.
Rule 164(16) and (17): what makes it void, and what still has to be paid
Rule 164(16): where the taxpayer is required to pay an additional amount of tax per the second proviso to s.128A(1) and does not pay it within the time specified, the waiver under the SPL-05 or SPL-06 order becomes void.
Rule 164(17): where interest or penalty is payable in respect of a demand for an erroneous refund, or for a period other than 1 July 2017 to 31 March 2020, and those amounts are mentioned in the SPL-05 or SPL-06, the applicant shall pay them within three months of the date of the order.
Both are traps for a taxpayer who treats the SPL-05 as the end of the matter. It is the end conditionally.
The proper officer — the Explanation to Rule 164
- for an application on a notice or statement under clause (a): the proper officer for issuing an order under s.73;
- for an application on an order under clause (b) or (c): the proper officer referred to in s.79.
Worth checking, because an application filed with the wrong officer loses time that the three-month clock does not give back.
Key takeaways
- Section 128A waives interest and penalty for 1 July 2017 to 31 March 2020 on payment of the full tax, by the notified date.
- SPL-01 for a pending notice or statement; SPL-02 for an order.
- A failed s.74 fraud allegation re-determined under s.75(2) is brought within the scheme by the first proviso.
- Erroneous refunds are excluded, and a pending appeal must be withdrawn.
- Interest and penalty already paid are not refunded.
- Rule 164(14): no order within three months (or four where no reply) means deemed approval.
- After rejection, the original appeal is restored — with an SPL-08 undertaking within three months where an appeal against the SPL-07 failed.
Read next
- The GST Demand Limitation Map: Sections 73, 74 and 74A
- The Suppression Allegation and How It Is Answered
- Rule 142: The DRC Forms From 01A to 08
- Section 128A of CGST Act 2017 — Waiver of Interest or Penalty
Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act and Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition). The date for payment under section 128A(1) is as notified by the Government on the Council's recommendations and should be checked against the current notification.
Key Facts About Section 128A and Rule
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes the entire process end to end for you.
What does section 128A waive?
Interest under section 50 and penalty under the Act, for the period 1 July 2017 to 31 March 2020, on payment of the full tax by the notified date.
Which form do I file?
SPL-01 where a section 73 notice or statement is pending without an order; SPL-02 where an order under section 73(9), 107(11) or 108(1) has been passed.
Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.
Section 128A and Rule: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.